Record increase in car production

Car production in the UK rose sharply in January, jumping by 64.8% from the same period in 2009.

The increase in production is the largest year-on-year increase in monthly car production since May 1976, according to the Society of Motor Manufacturers and Traders (SMMT).

SMMT figures reveal that a total of 101,190 cars were built in January.

Paul Everitt, SMMT chief executive, said: 'Vehicle and engine production rose for a third successive month in January, demonstrating the continued success of global scrappage incentive schemes.'

Scrappage – the end is nighHowever, there are worries that car production in the UK could decline over the coming months, because the Government's scrappage incentive will come to a close by the end of next month.

Calculations from the SMMT indicate that the UK scrappage scheme has been responsible for around 20% of all new car sales since it was introduced.

However, Everitt is optimistic that the recovery in sales and manufacturing will continue beyond the scrappage scheme. 'The SMMT expects a modest recovery in 2010 output as economic growth, a competitive exchange rate and the introduction of innovative new models to UK factories help to lift manufacturing levels above those seen in 2009.'